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Mental Health Parity Act Enacted as Part of Economic Stimulus Bill

The Paul Wellstone and Pete Domenici Mental Health Parity and Addiction Equity Act of 2008 was signed into law on October 3 as part of the Emergency Economic Stabilization Act financial-market rescue legislation.  The Act amends the Employee Retirement Income Security Act and the Public Health Service Act to require health insurance plans that offer mental health coverage to provide the same financial and treatment coverage offered for other illnesses.  It does not mandate that group plans must provide any mental health coverage. In 1996, a mental health parity law was enacted to provide parity between mental health coverage and medical-surgical coverage for annual and lifetime limits.  The new legislation expands parity by including deductibles, co-payments, out-of-pocket expenses, coinsurance, covered hospital days, and covered out-patient visits. The legislation includes a small-business exemption for companies with 50 or fewer employees.  It also includes an exemption for plans that experience an increase in actual, total costs with respect to medical and surgical benefits and mental health and substance use disorder benefits of 2 percent in the first plan year that the Act is applicable and 1 percent for each subsequent plan year. The parity requirements are effective in the first health plan year that begins one year after enactment of the bill.  Plans maintained under one or more collective bargaining agreements ratified before the Act’s enactment date are not subject to the requirements until the last of the collective bargaining agreements relating to the plan terminates (without regard to any extension agreed to after the Act’s enactment) or January 1, 2009, whichever is later. The Act directs the Secretary of Labor, Health and Human Services and the Secretary of the Treasury to issue implementing regulations within one year of enactment. To view the full text of the Emergency Economic Stabilization Act, click here.  The mental health parity provisions are found in Title V, Subtitle B.